When must a donor obtain a qualified appraisal for a noncash charitable gift and what information must the appraisal include?
Executive summary
The Internal Revenue Service requires a donor to obtain a qualified appraisal when the claimed deduction for a noncash charitable contribution exceeds $5,000 for a single item or a group of similar items, and that appraisal generally must be attached to Form 8283 and the donor’s tax return when the deduction meets reporting thresholds [1] [2]. The appraisal must be performed by a qualified, independent appraiser and include the appraisal’s basis, fair market value conclusion, description and condition of the property, the valuation method used, and certain attestations and signatures required by IRS rules [3] [4] [5].
1. When the IRS steps in: the $5,000 bright line and Form 8283
Federal rules draw a clear reporting line: donors must complete Form 8283 for any noncash charitable contribution deduction greater than $500, and when the deduction for an item or group of similar items exceeds $5,000 the donor must obtain a qualified appraisal and complete Section B of Form 8283 — with even larger donations (e.g., over $500,000) requiring the appraisal to be attached to the return [1] [2]. IRS guidance repeatedly underscores that donations above $5,000 trigger formal appraisal requirements; charities and donees cannot substitute their own valuations when the donor claims such deductions [2] [6].
2. Who must provide and pay for the appraisal: donor responsibility and independence
The IRS places the burden on the donor to obtain and pay for the qualified appraisal; the appraisal must be independent of the donee and generally cannot be supplied or financed by the receiving charity, and the appraisal is addressed to the donor rather than the charity [5] [7]. This allocation of responsibility is intended to reduce conflicts of interest and to ensure the reported fair market value is supported by an independent professional opinion rather than the charitable recipient’s internal estimate [5].
3. Who counts as a “qualified appraiser” and timing limits
Final regulations and IRS guidance define a qualified appraiser and set competency and independence expectations; appraisers often must attest to meeting regulatory qualifications and not being barred from practice, and the rules reference regulatory definitions added by statutory changes such as the Pension Protection Act (PPA) [4] [7]. Practical guidance used by tax professionals warns that an IRS-acceptable appraisal must generally be recent — many practitioners cite that the appraisal should be conducted no more than 60 days before the contribution — to reflect fair market value at the time of donation [5].
4. What the appraisal must contain: the spine of documentation
IRS materials and professional guides require the appraisal to set out a clear description of the property, its condition, the appraiser’s methodology for valuing the property (comparable sales, cost approach, income approach, etc.), the appraiser’s analysis leading to a concluded fair market value, and the appraiser’s declaration and signature; Form 8283 Section B expects the appraiser’s signature and related identifying information as part of the substantiation [3] [4] [5]. Publication 561 and practitioner guides stress that the appraisal should include support for the valuation approach and any assumptions — shortcomings in these elements can prompt the IRS to disallow the deduction or extend examination exposure [6] [3].
5. Exceptions, pitfalls, and practical cautions
Not every noncash gift needs a qualified appraisal: publicly traded securities with ready market quotations, many vehicles documented by Form 1098‑C, inventory, and noncash property valued under $5,000 (with a few exceptions such as clothing or household items in poor condition claimed over $500) do not require a qualified appraisal [6] [8]. Tax advisers and appraisal professionals warn that appraisals must be USPAP‑compatible and cannot be old insurance appraisals repurposed for tax claims; errors on Form 8283 or missing appraiser attestations have led to denied deductions in recent IRS examinations [5] [7].
6. Where reporting and dispute risk converge
The regulatory architecture — the $500 Form 8283 trigger, the $5,000 qualified‑appraisal trigger, and the documentation demands embodied in Publication 561 and IRS instructions — is designed both to substantiate generous deductions and to flag items for closer review; donors who skip appraisal requirements, rely on unsuitable appraisers, or fail to complete Form 8283 risk losing the deduction or facing penalties and extended IRS scrutiny [2] [1] [6].